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Question
Ram deposited ₹ 5000 in a bank which compounds interest half yearly at an annual rate of 6% and Rahim depoisted same amount in different back which compounds interests quarterly at the same rate. Who will get more interest after 1 year and by how much?
Ram deposited ₹ 5000 in a bank which compounds interest half yearly at an annual rate of 6% and Rahim depoisted same amount in different back which compounds interests quarterly at the same rate. Who will get more interest after 1 year and by how much?
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Solution
The correct option is C Rahim, ₹ 2
Ram deposited ₹ 5000 in a bank which compound interest half yearly.
annual rate = 6%
Since interest is compounded half yearly, Interest has to be calculated twice a year
Half yearly rate = 62 = 3%
Interest compounded half yearly here for Ram. So, t = 2
Amount after 1 year =5000(1+3/100)2
=5304.5
5305(.5 paisa rounded to 1 rupee)
***
Rahim deposited ₹ 5000 in a bank which compound interest quarterly.
Annual rate = 6%
Since interest is compounded quarterly, Interest has to be calculated four times a year
Quarterly rate = 64 = 1.5%
Amount after 1 year =5000(1+1.5/100)4
=5306.81
5307(.81 paisa rounded to 1 rupee)
The more amount Rahim would get =5307−5305=₹ 2
Ram deposited ₹ 5000 in a bank which compound interest half yearly.
annual rate = 6%
Since interest is compounded half yearly, Interest has to be calculated twice a year
Half yearly rate = 62 = 3%
Interest compounded half yearly here for Ram. So, t = 2
Amount after 1 year =5000(1+3/100)2
=5304.5
5305(.5 paisa rounded to 1 rupee)
***
Rahim deposited ₹ 5000 in a bank which compound interest quarterly.
Annual rate = 6%
Since interest is compounded quarterly, Interest has to be calculated four times a year
Quarterly rate = 64 = 1.5%
Amount after 1 year =5000(1+1.5/100)4
=5306.81
5307(.81 paisa rounded to 1 rupee)
The more amount Rahim would get =5307−5305=₹ 2
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